Basic Income and Helicopter Money

These are special times. The Netherlands is slowly locked by the corona virus. According to Alexander de Roo, we must now take concrete steps towards the introduction of helicopter money and basic income.

These are special times. The Netherlands is slowly locked by the corona virus. This also applies to large parts of the world. This has effects on public health and society. As a result, the economy is suffering a major setback. All over the world, governments are forced to pump extra money into society to keep the economy going, and fortunately they do.

It has been argued for 50 years that the most effective way to do that is helicopter money. The Nobel Prize winner for the Economy Milton Friedman coined this term. Every individual aged 18+ receives living money from the government.

Some small Asian city-states such as Hong Kong, Singapore and Macau have now actually used the targeted helicopter money for the first time. Helicopter money is very effective. In Korea – a country with at least 50 million inhabitants – it is already being discussed to do this.

The Netherlands

In the Netherlands, on February 15, 200 members and supporters of various political parties came to a meeting of the Basic Income Association in Amsterdam. The Financieel Dagblad wrote that matters such as the allowance affair in the Netherlands are crying out for a simple and confidence-inspiring basic income answer ”. Click here to read this article.

Dutch party politics are also starting to move more and more. Within GroenLinks the working group for basic income has now been recognized and at the postponed party congress broadly supported motions are still on the agenda for basic income and unpaid labor. At the PvdA conference on March 7, a protruding room discussed basic job and basic income. The basic job seems more popular than the basic income within the PvdA, but it turned out that there is also a growing number of advocates for basic income.
D66 is working on the elaboration of their congressional motions. They asked for the Social Cultural Planning Agency to look at basic income and to let the Central Planning Bureau (CPB) calculate basic income.
At the meeting of February 15, VVD member Robin Fransman argued that basic income is inevitable today. It contributes to solutions that are now really needed.
Prof. Dr. Ir. Wouter Keller (former CBS employee) recently passed on a variant of negative income tax (another term for almost the same idea) to the CPB. This produced positive results. The bottom 60% of the Netherlands is improving and sometimes as much as 7% and the top 40% is only 2 to 3%.

Finland, Barcelona, ​​regular assistance

This spring, the results of the trials with basic income in Finland and Barcelona and the experiments with non-regular assistance in ten Dutch municipalities will be announced. These data also provide insight into the relevance of basic income today.

With this new material, we continue our discussions with all kinds of political parties about basic income, so that they can take it into account when considering the election program for 2021. A majority of Dutch citizens are positive about basic income. Experiments have been done.
Just now take concrete steps towards the introduction of helicopter money and basic income.

Alexander de Roo, March 2020
Image by Cock-Robin from Pixabay

For a Central Bank serving the citizen

 7500 euros: this is the amount that every citizen of the euro area would have received if the European Central Bank (ECB) had distributed directly to the population the 2.6 trillion euros it has preferred to inject into the financial markets since Four years.

This shocking figure, revealed by the NGO Positive Money Europe, poses a simple and radical question: would not monetary policy be more effective if the newly created money was directly paid to European households? Continue reading “For a Central Bank serving the citizen”

Helicopter money is the new “whatever it takes”

Exactly seven years ago, the President of the European Central Bank, Mario Draghi, pledged the ECB would do “whatever it takes” to preserve the euro. Those few words will be remembered as a decisive step towards the end of the Eurozone crisis, as it paved the way for the launch of quantitative easing (QE).

But QE only managed to push the problem further down the road, and the ECB is once again worried about an economic slowdown. This month, the ECB has announced that it will consider more policy support to the Eurozone economy, including relaunching QE.

Some voices are saying the ECB should start buying equity stocks [1] as part of quantitative easing. This is what Blackrock (the world’s largest asset manager) suggested last week. Everyone can guess who would benefit most from this.

We, on the contrary, argue that 7 years after Draghi’s heroic “whatever it takes” speech, more of the same policies will not be good enough anymore. The European Central Bank needs to find new ways that will benefit all citizens, not just the banks, asset managers and the financial and corporate elite.

The ECB should clearly commit to deploying “helicopter money” – direct transfers of newly created money to EU citizens – if it needed to. Read why helicopter money is the new “whatever it takes” here.

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Helicopter Money is liked by 54% of Europeans

Recent survey shows that a broad majority (54%) of the European population would support a “helicopter money” from the European Central Bank while only 14% would be against.

In case this wasn’t already obvious already: most Europeans would like to receive money directly from the ECB. This idea, which is most known under the nickname ‘helicopter money’ is gaining traction since the CB engaged in quantitative easing back in 2015.

recent survey carried out by the polling company Ipsos for the Dutch bank ING shows that no less than 54% of the respondents think ‘helicopter money” would be a good idea, while only 14% are against. Continue reading “Helicopter Money is liked by 54% of Europeans”

  Helicopter money and a basic income

How the Bank of England might create new money to pay into the economy as  a Basic Income

In televised debates during the recent general election campaign, several politicians made reference to there being no “magic money tree”. When in fact, there sort of is. This, together with a survey in 2014 that showed that only one in ten MPs know where money comes from, exposes a huge education gap amongst our most powerful elected officials, on one of the most important aspects of our economy: money. Continue reading ”  Helicopter money and a basic income”

MEPs call on Mario Draghi to consider helicopter money

Eighteen members of the European Parliament have signed an open letter to the Head of the European Central Bank, emphasizing the need to consider “helicopter money” — a proposal to distribute money directly to people as a citizens’ dividend.

Some advocates argue that a basic income should be financed by “helicopter money” — the printing of new money by central banks for direct distribution to individuals. To be sure, the policy is contested, even among basic income supporters. Many suggest redistributive policies to fund a basic income, as opposed to the creation of new money, and some have vocally opposed helicopter money. Continue reading “MEPs call on Mario Draghi to consider helicopter money”

Helicopter money or European Unconditional Citizens Income?

Somewhere in March 2015, the European Central Bank (ECB) launched its long-awaited programme of quantitative easing (or QE), adding lots of public debt to the private kind it has already been buying. Its monthly purchases will rise from around €13 billion ($14 billion) to €60 billion until at least September 2016. The ECB is just the latest central bank to jump on board the QE bandwagon. Most rich-economy central bankers began printing money to buy assets during the Great Recession, and a few, like the Bank of Japan, are still at it. But what exactly is quantitative easing, and how is it supposed to work? Continue reading “Helicopter money or European Unconditional Citizens Income?”

Can helicopter money kick start the Eurozone?

With Eurozone growth still sluggish, should the European Central Bank (ECB) consider a radical option – like helicopter money?

ING senior economist Teunis Brosens explains, in this eZonomics video, that the ECB has already employed quantitative easing[1] and lowered interest rates below zero. But how effective these measures will be is unclear, he says.

Continue reading “Can helicopter money kick start the Eurozone?”

What is helicopter money?

Helicopter money is a reference to an idea made popular by the American economist Milton Friedman in 1969.

In the now famous paper “The Optimum Quantity of Money”, Friedman included the following parable:

Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated.”

The basic principle is that if a central bank wants to raise inflation and output in an economy that is running substantially below potential, one of the most effective tools would be simply to give everyone direct money transfers. In theory, people would see this as a permanent one-off expansion of the amount of money in circulation and would then start to spend more freely, increasing broader economic activity and pushing inflation back up to the central bank’s target. Continue reading “What is helicopter money?”